Question

Biogen is one of the largest and oldest independent biotechnology companies in existence. How has its strategy changed over the years to stay competitive with low-cost biotechnology companies in developing countries or new companies in Silicon Valley? What are some ways it has cut R&D costs? I know Biogen has the trust of consumers, but once a drug is developed it can be sold to another company and branded differently. Hopefully, my question makes sense. Thank you!

Answer 1

Biogen, Inc. (previously known as Biogen Idec) is an American multinational biotechnology company based in Cambridge, Massachusetts, specializing in the discovery, development, and delivery of therapies for the treatment of neurodegenerative, hematologic, and autoimmune diseases to patients worldwide.

One of the pioneers in biotechnology, Biogen today has the leading portfolio of medicines to treat multiple sclerosis (MS), has the first and only approved treatment for spinal muscular atrophy (SMA) and is at the forefront of research into new medicines for neurological and neurodegenerative conditions. Led by world-class research and development, Biogen uses novel science and leading-edge technologies to create, commercialize, and manufacture transformative therapies for patients with few or no treatment options. Biogen was founded in 1978 in Geneva[2] by several prominent biologists, including Kenneth Murray of the University of Edinburgh, Phillip Allen Sharp of the Massachusetts Institute of Technology, Walter Gilbert of Harvard (who served as CEO during the start-up phase), Heinz Schaller, University of Heidelberg and Charles Weissmann, University of Zurich (who contributed the first product interferon alpha). Gilbert and Sharp were subsequently honored with Nobel Prizes: Gilbert was recognized in 1980 with the Nobel Prize in Chemistry for his work in understanding DNA sequencing, while Sharp received the Nobel Prize in Physiology or Medicine in 1993 for his discovery of split genes.

It is our belief that no other area of medicine holds as much promise with as much need as neuroscience. With our foundation of almost four decades of expertise in neurology, we aim to be the leader in this area by developing transformational therapies to address what we believe are becoming the world’s most significant unmet medical needs.

Biogen's top selling drug, Tecfidera is sold in markets around the globe and accounts for around 35% of annual revenues. It is an oral therapy marketed in the US for the treatment of patients with relapsing forms of MS. It is sold in Europe for patients with relapsing-remitting MS (RRMS).

The firm's next-best seller, Avonex (interferon), accounts for some 25% of revenues. A treatment to improve walking in adults with MS, the Avonex pen is a single-use auto-injector version of the drug for once-weekly dosing.

Biogen has offices in the US, Australia, Canada, Japan, the US, and several European countries. It has direct sales operations in about 30 countries and operates through distribution partners in another 60 countries.

The US is Biogen's largest market, bringing in more than 60% of total revenues. Europe follows, with Germany alone representing more than 5% of revenues.

Strategies:-

Biogen is the industry leader in multiple sclerosis treatments, and in Europe it has a strong business in biosimilars (Benepali, a biosimilar version of Enbrel, and Flixabi, a biosimilar of Remicade). It launched four new therapies during 2016, and the approval of spinal muscular atrophy treatment Spinraza that year should provide the company with its next blockbuster.

Biogen's pipeline of drug candidates is focused on treatments for central nervous system ailments including Alzheimer's, MS, amyotrophic lateral sclerosis (ALS), neuropathic pain, and lupus. In addition to proprietary candidates, the company has collaborative development candidates with Genentech, Portola Pharmaceuticals (lupus and rheumatoid arthritis), and other drugmakers, and it continuously looks to expand its pipeline through acquisitions and partnerships. R&D expenses totaled $1.97 in 2016, down from $2.01 billion in 2015.

The company has had its share of setbacks, though. In 2015, Tysabri failed in a late-stage clinical trial for secondary progressive MS. The company responded to the setback by initiating certain restructuring efforts, including stopping tests for Tysabri's effectiveness against secondary progressive MS, as well as stopping test for pipeline drug anti-TWEAK's effectiveness against lupus nephritis. Biogen also cut some 880 employees (about 11% of its workforce) that year. In 2016, the company's anti-LINGO MS drug failed in mid-stage trials; Biogen is exploring additional studies for the treatment.

In early 2017 Biogen spun off its growing hemophilia operations into a separate, publicly traded company named Bioverativ. That business' marketed products include Eloctate and Alprolix; the new firm continues its activities around the discovery and development of hemophilia therapies utilizing XTEN technology.

Mergers and Acquisitions

Biogen has expanded its operations through purchases of drug development firms, as well as by purchasing commercialized and development-stage drugs. In 2015 the company acquired UK-based Convergence Pharmaceuticals, a clinical-stage biopharmaceutical, for $200.1 million. .